# Insurance (GIN)

## Title 7. Maryland Insurance Acquisitions Disclosure and Control Act

### Subtitle 2. Acquisitions and Investments -- in General

#### Section 7-201

(a) In addition to any other investment allowed elsewhere in this article, a domestic insurer, either alone or with another person, may invest in or otherwise acquire a subsidiary that engages in or is registered to engage in one or more of the following insurance businesses or business activities that are ancillary to an insurance business:

  (1) conducting an insurance business that is authorized by the jurisdiction where the subsidiary is incorporated;

  (2) acting as an insurance producer for its parent, its parent's insurer subsidiaries, or its parent's intermediate insurer subsidiaries;

  (3) investing, reinvesting, or trading in securities for itself, its affiliate, its parent, or another subsidiary of its parent;

  (4) managing an investment company that is subject to the Investment Company Act of 1940, including managing related sales and services of the investment company;

  (5) acting as a broker-dealer that is subject to the Securities Exchange Act of 1934;

  (6) providing investment advice to governments, governmental units, corporations, or other organizations or groups;

  (7) performing other services related to the operations of an insurance business, including actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal, and collection services;

  (8) owning and managing assets that its parent may own and manage;

  (9) acting as administrative agent for a governmental unit that performs an insurance function;

  (10) financing insurance premiums;

  (11) conducting any other business activity that is reasonably ancillary to an insurance business; or

  (12) owning one or more corporations engaged exclusively in or organized to engage exclusively in one or more of the business activities specified in this section.

(b) Subject to the approval of the Commissioner and to the provisions of this title, a domestic mutual insurer may acquire or form a subsidiary insurance holding company.

#### Section 7-202

(a) The investments authorized in this section are in addition to investments in common stock, preferred stock, debt obligations, and other securities allowed elsewhere in this article.

(b) In calculating investments under this section, a domestic insurer:

  (1) shall exclude investments in domestic or foreign insurance subsidiaries; and

  (2) with respect to investments in all other subsidiaries, shall include:

    (i) the net total of money spent, obligations assumed, and other consideration given to acquire or form the subsidiary, including organizational expenses and contributions to capital and surplus of the subsidiary, whether or not represented by the purchase of capital stock or issuance of other securities; and

    (ii) the amount spent after the subsidiary is acquired or formed to acquire additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus of the subsidiary.

(c) A domestic insurer may invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries if:

  (1) the amount does not exceed the lesser of 10% of the domestic insurer's assets and 50% of the domestic insurer's surplus as regards policyholders; and

  (2) after the investment, the domestic insurer has remaining surplus as regards policyholders that:

    (i) bears a reasonable relation to the domestic insurer's outstanding liabilities; and

    (ii) is adequate to meet the domestic insurer's financial needs.

(d)

  (1) For purposes of this subsection, total liabilities are calculated in the same manner that total liabilities are calculated for the annual statement required by the National Association of Insurance Commissioners.

  (2) This subsection applies only to a domestic insurer whose total liabilities are less than 10% of its assets.

  (3) For purposes of this subsection, in calculating assets and surplus as regards policyholders remaining after an investment, a domestic insurer shall treat the investment as if it were a nonadmitted asset.

  (4) A domestic insurer subject to this subsection may invest any amount in common stock of one or more of its subsidiaries if, after the investment, the domestic insurer has remaining assets and surplus as regards policyholders that:

    (i) bear a reasonable relation to the domestic insurer's outstanding liabilities; and

    (ii) are adequate to meet the domestic insurer's financial needs.

  (5) A domestic insurer subject to this subsection may invest any amount in preferred stock and debt obligations of one or more of its subsidiaries if, after the investment, the domestic insurer has remaining surplus as regards policyholders that:

    (i) bears a reasonable relation to the domestic insurer's outstanding liabilities; and

    (ii) is adequate to meet the domestic insurer's financial needs.

(e)

  (1) In this subsection, "total investment" includes:

    (i) a direct investment by the domestic insurer in an asset other than securities of its subsidiaries; and

    (ii) the domestic insurer's proportionate share of any investment in an asset by a subsidiary of the insurer, calculated by multiplying the amount of the subsidiary's investment by the percentage of the domestic insurer's ownership of the subsidiary.

  (2) A domestic insurer may invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the domestic insurer or one or more insurance subsidiaries, to the extent that each subsidiary limits its investments in any asset so that the investments will not cause the amount of the total investment of the domestic insurer to exceed any of the investment limitations applicable to the domestic insurer under subsection (c) of this section or under Title 5, Subtitles 5 and 6 of this article.

(f) Notwithstanding the limitations specified in subsections (c), (d), and (e) of this section, and treating the investment as if it were a nonadmitted asset, with the approval of the Commissioner, a domestic insurer may invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries if, after the investment, the domestic insurer has remaining surplus as regards policyholders that:

  (1) bears a reasonable relation to the domestic insurer's outstanding liabilities; and

  (2) is adequate to meet the domestic insurer's financial needs.

#### Section 7-203

(a)

  (1) Except as provided in subsection (b) of this section, within 3 years after a domestic insurer ends its control of a subsidiary, the domestic insurer shall dispose of all investments in the subsidiary that were made under Sec. 7-202 of this subtitle.

  (2) The Commissioner may extend the time for disposal of the investments.

(b) A domestic insurer is not required to dispose of an investment under subsection (a) of this section if, after the investment is made:

  (1) the investment meets the requirements for investment under another provision of this article; and

  (2) the domestic insurer notifies the Commissioner that the investment meets the other requirements.

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Md. Code Ann., Ins. (as displayed at mgaleg.maryland.gov, October 16, 2026)